The Oregon Biz Report - Business News from Oregon

Oregon Restaurant Industry Hit by Economic Downturn

December 2, 2008

By Nike Kern, Biz Reporter

With today’s economy in a tailspin one of our state’s leading industries is being hit harder than most. The Oregon restaurant industry employs an estimated 110,000 and creates a whopping economic impact of 9.7 billion dollars annually into our economy. With more than 9,000 restaurants and food service outlets throughout the state it appears the short end of the stick has been given to the restaurant industry during today’s economic downturn.

“Three to four weeks ago the restaurant business just dropped off,” explains Bill Perry vice president of government affairs for the Oregon Restaurant Association. “People just stopped going out to eat and a 30-40 percent decline appeared to occur over night.”

During the first three quarters 2008, the Association saw the downturn begin with a four percent decline. Rising fuel costs drove up food prices by eight percent in the first two quarters of the year. “Generally, if you have a four percent downturn you can make some shifts and survive,” explains Perry. “But when you have a decline in revenue and a growth in the cost of products it gets even more difficult.”

Oregonians are eating out by going the quick service route rather than the more typical mid-range restaurants. Today, “Mom and Pop” independents, in addition to the mid-range restaurants, are getting hit harder. High-end restaurants tend not to experience the pain as badly due to expense account clienteles and special event spending.

A new survey by NPD Group, a global consumer and market research firm, illustrated that when consumers trim their dining out budget first, when trying to reduce their spending. A recent survey showed fifty-seven percent of consumers are planning to dine out less often during the economic slow down. “Hopefully families will being getting out to eat during the Christmas season,” says Perry.

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I can’t help but ask what happened to cause the drop 3-4 weeks ago? There was the election, Holloween, or maybe just a the consumer ran out of their patience with the economy.

DaveDecember 2, 2008

Or maybe their stimulus check ran out. Whatever the case, I see more and more restaurants being closed down and it worries me. The average eatery can withold a few seasons without revenue, but not if it spills over into a year, and the news we recived in my mornign paper is that the recession has been a year. This is a tough time with them.

Alpha DogDecember 2, 2008

The only thing that the stimulus check stimulated was my frustration at politicians.

nonameDecember 2, 2008

I am still shocked at the closing of the Elmer’s on 82nd Ave in Portland. That is a street in a big city that has always been packed whenever I have been there. Maybe the manager drove it into the ground.

GienieDecember 2, 2008

Several small businesses have closed here in Eugene. Right in the heart of downtown we lost a well known cafe just about two weeks ago. On the other hand, a fast food place just opened up in Springfield, and the business has had to place workers outside specifically to direct traffic as the lines are long and the waiting time to get through the drive-through is at least 20 minutes.